Kohlberg Kravis Roberts (KKR) Taking Hit On Mortgage Holdings
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Kohlberg Kravis Roberts, the Wall Street Mega-power, is looking to go public. However, the combination of the credit crunch and problems with KKR Financial division are holding them back. Word came out last night that they are facing a loss of about 200 million dollars plus on a 5 billion dollar short term debt offering that was backed by mortgage assets. They are seeking to delay repaying the debt to 15 investors until the market stabilizes.
Some of the short-term debt was also held by money-market funds. The move at KKR Financial (NYSE:KFN) Holdings LLC is so far the biggest blowup to hit the market for commercial paper, which is a form of short-term debt used by companies to fund operations. Some issuers of asset-backed commercial paper have been hit by declining values of collateral linked to sub-prime mortgages.
News of the repayment delay and associated losses of up to 290 mln usd comes as KKR founders Henry Kravis and George Roberts mull a public offering. They are also trying to complete several buyouts, but financing has been disrupted by the debt-market turmoil. via CNN Money
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